Why would anyone abandon an incredible job at great financial
risk to start a business? That's what critics and naysayers
asked Carlo Crocco when he left his family's watchmaking
dynasty to start Geneva, Switzerland-based MDM Geneve, manufacturer
of the exclusive Hublot watch.

Crocco turned a deaf ear to the critics, convinced he could do
what they thought impossible. The result is a company that produces
one of the world's most distinctive watches. This year,
Crocco's company will rack up sales of $22 million. But getting
to that point was a study in perseverance, conviction and enormous
risk-taking.

When Crocco decided to leave the family fold in 1976 at age 32,
almost everyone who knew him was convinced he had a few screws
loose. As scion of Italy's premier watchmaking family, the
Milan-based Binda company, Crocco had it made. In fact, until he
defied tradition, no family member had ever left the firm.

It's easy to understand why. Founded by Crocco's
grandfather in 1906, the time-weathered company was as solid as the
Rock of Gibraltar. Today, Binda controls the largest watch
distribution network in Italy. Like his parents, uncles and
cousins, Crocco grew up in the business. He had become its top
marketing and creative person, and was destined to take the helm of
the sprawling multimillion-dollar empire. But Crocco had other
plans.

The need to go off on his own became an all-consuming drive he
couldn't deny. "Growing up in a watchmaking family, there
was no question about what I was going to do for the rest of my
life," he recalls. "When I told my uncles I was leaving,
they thought I was crazy."

It was no snap decision, either. "I agonized over it,"
Crocco says reflectively. "But when I compared the pros and
cons, I felt I had no choice. I had been working for my
family's business since graduating from college. I loved the
business, but I had my own ideas I wanted to test. I wanted to make
my own statement."

Not only was Crocco bent on starting his own company; he decided
to relocate to Switzerland to do it. "If you're going to
be in the watch business, Switzerland is the place to be," he
says.

Crocco's most important reason for setting up shop in
Switzerland was to create a unique watch that would enjoy world
recognition. "My vision was to produce something
different," he says. "I envisioned a timepiece that
flawlessly merged Italian styling with Swiss craftsmanship."
Watch connoisseurs know that's as close to perfection as anyone
can get. If Crocco's plan worked, he'd capture the
hearts-and pocketbooks-of fickle, fashion-forward Europeans.

Taking His Time

Making his vision happen took four years and $4 million, some of
which was Crocco's, the rest borrowed from banks. Crocco spared
no expense creating the right product. He built a small factory and
hired a battalion of top Swiss designers to execute his ideas.

In 1980, Crocco's creation was born, and MDM Geneve was
formed. He dubbed his watch the Hublot (it means
"porthole" in French) and introduced it at
Switzerland's prestigious Basel watch fair. "The
watch's nautical theme implies adaptability," says
Crocco.

"Most handcrafted luxury watches are heavy and meant to be
worn only on special occasions," explains Michael Goldstein,
vice president of MDM America Inc. "But the Hublot's most
distinctive feature is that it can be worn at state dinners or the
opera, yet is also suitable for playing golf and deep-sea diving.
This made it unique."

Guaranteed to be water-resistant to a depth of 165 feet (and up
to 1,000 feet for professional divers' watches), the Hublot was
made to take a beating. But the watch's most distinctive
feature, according to Crocco, is its band. It's not made of
gold, silver, leather or exotic skins like lizard or ostrich.
It's made of rubber.

The idea struck Crocco on a flight from Paris to Geneva.
"Absentmindedly, I began to color in my watchband with a black
[felt-tip pen]," he says. "When I realized what I was
doing, I loved the effect. I knew a black strap would smartly
complement the black dial of several of my models and also contrast
strikingly with the dials of other models without competing with
the timepiece's lines."

Yet Crocco quickly discovered great ideas are easy to come by
but difficult to execute. He estimates it took almost $1 million in
research and development costs to come up with the perfect rubber
watchband. In the end, though, it was money well spent. The results
were startling and revolutionary.

Crocco developed a tempered rubber that is virtually
indestructible. "Unlike conventional metal and leather bands,
[the Hublot band] is resistant to chemical deterioration," he
says. "It absorbs body oils and conforms to the shape of the
wearer's wrist. And it has zero weight, making it ideal for
sports and virtually any activity."

The biggest challenge: inserting steel plates into the ultrathin
strap to hold the watch securely. When all was completed, the
lightweight timepiece and sleek black rubber watchband added up to
an exquisite watch that retails for $2,500 to $60,000. Precious
stones knock the price up considerably.

Clearly, Crocco was breaking the rules-and at first, many
snobbish watch dealers thought the rubber watchband was heresy.
Eventually, however, the watchband came to be viewed as a key to
Crocco's personality, a symbol of the reason he went off on his
own. Wrote one journalist, "The rubber strap captures
Crocco's penchant for originality and endurance, his contrary
nature and his zest for bucking tradition."

Unique as the finished product is, Crocco was ready to pull his
hair out when no one showed up the day he debuted his watch at the
1980 Basel watch fair. "I was nervous, to say the least,"
he chuckles. Like any anxious entrepreneur who has just invested
years of his life and a pile of money, he began entertaining second
thoughts. Was his watch too far-out for the world's top watch
dealers? Or maybe the Hublot was too far ahead of its time.

Thankfully, Crocco's anxiety was short-lived. The second day
of the fair, a few people trickled in. By the third day,
Crocco's little booth was buzzing with activity. It took a
while for dealers and buyers to discover the Hublot, but once they
did, the elegant timepiece became an immediate topic of
conversation.

"That was the beginning of the story," Crocco says.
Orders followed as the Hublot turned in a stunning debut
performance. But the real work lay ahead. The next and most
critical step was marketing the product. Although first-year sales
hit a respectable $2 million, Crocco wanted more. "It's a
good feeling knowing you have a unique watch," he says,
"but if you can't break into the luxury watch market,
you're doomed."

Marketing Maven

Just as Crocco knew what he wanted his watch to look like, he
also had definite ideas about how it should be positioned. To
capture the attention of well-heeled buyers, he pinpointed
exclusive jewelry stores. "Image is critical," he
stresses.

The distribution of the watches was also important. Rather than
turn the distribution process over to a wholesaler, Crocco set up
offices in key European cities and set his sights on breaking into
the U.S. market.

Once the distribution machinery is in place, it takes time,
patience and lots of high-class selling to launch a luxury product,
according to Goldstein. "This is not a fast-buck
business," he says. It requires a subtle blend of
sophisticated marketing and advertising, superior service and
low-pressure selling. And even if all those factors are working
together, it still takes about five years to build relationships
with exclusive jewelry stores.

"The watch market is crowded," Goldstein adds.
"There is plenty of competition in all price ranges." In
Crocco's market, the very high end, that means facing off
against formidable superstars like Rolex, Patek Philippe, Vacheron
Constantin and Cartier.

Getting retailers to commit to any watch line takes
arm-twisting. And persuading an exclusive watch dealer to plunk
down hefty sums for a pricey watch that may be difficult to sell
requires the patience of Job. "You can't blame retailers
for being skeptical," says Goldstein. "We were asking
them to invest thousands of dollars in a watch they'd never
tested."

Most exclusive jewelry stores didn't know what to make of
the offbeat timepiece. Some felt the rubber watchband was absurd, a
radical break from tradition. In short, "many dealers were
afraid of being pioneers," says Edward Suhyda, the
company's western regional sales manager for the United States.
"They were afraid of going out on a limb."

Nobody understands the dealer mentality better than Suhyda.
Prior to joining the company, he owned a jewelry store in the Ft.
Lauderdale, Florida, area and was the largest Hublot dealer in the
United States. He loved the watch so much that in 1994, he asked to
join the company.

The key to the Hublot's success was committed salespeople
like Suhyda who believed in the product and could walk into
exclusive jewelry stores and make a compelling presentation.
"Selling the Hublot was a two-step process," Goldstein
recalls. "First, we had to convince retailers to try it. Once
they were convinced, we had to teach them how to sell it to their
customers."

Americans were a particularly hard sell. Crocco introduced the
Hublot to the United States in 1984 but didn't make real
inroads until 1990.

"Breaking into the States was an uphill journey all the
way," Crocco says. "In the mid-1980s, the American market
wasn't ready to understand the concept. Even after potential
buyers got past the quirkiness of the rubber strap, they didn't
understand the watch was a long-term investment. They couldn't
see spending a lot of money on this watch when they could buy a
sturdy Japanese watch for much less."

"Most Americans were unwilling to buy the Hublot because it
had no track record," Suhyda concurs. "They'd heard
of Rolex, but they had never heard of Hublot and were skeptical.
They mistakenly thought they were spending a great deal of money
for a rubber watchband. We had to explain to them that they were
spending a lot for the watch, not the band."

Crocco wouldn't give up. Building his family's watch
line had taught him that a sophisticated publicity campaign using
slick print ads in top consumer and trade magazines would
eventually work. In 1993, he launched a marketing campaign to let
potential buyers know that an impressive lineup of the rich and
famous proudly wear Hublots. The list includes King Carl Gustav of
Sweden, Prince Albert of Monaco, Giorgio Armani, Sylvester
Stallone, Candice Bergen, Elton John, and former New York Knicks
coach Pat Riley.

By 1985, the Hublot was enjoying well-deserved recognition
throughout Europe. But just as sales hit a steady upswing, Crocco
discovered an unforeseen problem: Counterfeit knockoffs of the
Hublot were popping up all over the place.

Imitation is said to be the highest form of flattery, but Crocco
wasn't amused. The Hublot knockoffs put a serious crimp in
sales. Although Goldstein says most were "cheap
imitations," some of the copies were so good, it was hard to
tell them from the real thing. Stopping the counterfeiters was a
long and expensive process. It took a few years and eye-popping
legal fees, but Crocco prosecuted and put the counterfeiters out of
business.

Dreams Come True

Today, the Hublot is a hit worldwide. It's been quite a
ride, but Crocco's dreams have come true. Looking back, he says
it's an incredible feeling to find out your instincts were
right. It took longer and required more money than anticipated to
launch his company, but the end dramatically justified the
means.

"Early in the process, I learned that you can't give
up, no matter how tough it seems," Crocco says. "If you
love and believe in what you're doing, stick with it. Things
will turn around." This elegant entrepreneur, heralded as the
"watchmaker's watchmaker," is living proof of
that.

Contact Source

Bob Weinstein is the author of eight books and a regular
contributor to Entrepreneur.